Next week’s Forex forecast

The U.S. dollar strengthened its position somewhat on the world market during the period from 4 to 8 November after the European Central Bank lowered its rate and the GDP data for the third quarter was better than expected and became an occasion for speculation about the imminent reduction of quantitative easing program.

On the coming week the release of key macroeconomic data from the U.S. that could have a significant impact on the dollar is not scheduled. On Monday, November 11 in the U.S. is holiday, but the main event of the week will be a vote in Congress for the candidate Jeannette Yelen as the next head of the Fed (during the day November 14), which should replace Bernanke at the end of January 2014. She is a supporter of the need to continue ultra soft monetary policy, but her candidacy has long been questioned by market participants and the vote is unlikely to be a reason for significant movements.

Single European currency traders in the economic calendar do not appear any important news that could significantly affect the prospects of the euro. EURUSD movements under such conditions will be mainly determined by the behavior of the dollar along the whole market, as well as by technical support and resistance levels. After testing the level of 1.3280, fall of the euro may be suspended, but there aren’t any fundamental prerequisites for moving up yet.

The Bank of England on November 13, 10.30 GMT will introduce the next quarterly review to the public. Macroeconomic data from the United Kingdom recently received a very positive and therefore can be expected to improve forecasts for economic growth rate compared with previous report. During the press conference, Mark Carney should certainly confirm that the regulator is not considering additional easing possibility. Overall, the event is traditionally an important but it will unlikely change sterling’s outlook. We believe that it will continue to be one of the strongest currencies in the market. In the case of overcoming the resistance of 1.6125 on positive news background, GBPUSD pair may try to beat the strength at 1.6230 level.

Australian dollar is expected the data on business confidence publication from the country’s largest bank National Australia Bank Limited, which will be published on Tuesday at 00.30 GMT, but the indicator has a history of low-key effect on the market and will be able to move the quotes only if a significant deviation of actual data from the median forecast. The main event of the week for New Zealand currency will be the report on retail sales for October (November 13, 21.45 GMT). We believe that both Pacific currencies will continue to move into the channel, performed by last week’s trend. From technical analysis point of view, the closest major levels of resistance for them are 0.9565 (200-day moving average) and 0.8420. Their overcoming can open the way to the levels 0.9650 and 0.85, respectively.

In the absence of important news from Japan and the United States, USDJPY pair may be determined by the behavior of stock market indices.

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